2.10 Index of disadvantage

Why is it important?:

The links between poverty, unemployment, poor education, racism and consequent social dysfunction, stress, social exclusion, and poor health are well documented (Wilkinson & Marmot 2003; Marmot 2005; Paradies 2006; Saunders & Davidson 2007; Sassi 2009). This performance measure is a composite measure (an index) of advantage/ disadvantage. It provides a broad basis for tracking progress in addressing Indigenous disadvantage across the spectrum of determinants of health.

The ABS has developed indexes to allow measurement of relative socioeconomic status at a small area level (Adhikari 2006). These indexes summarise a range of socioeconomic variables associated with advantage and disadvantage such as the proportion of families with high incomes, people with a tertiary education, and employees in skilled occupations. The indexes provide an estimate of relative advantage and disadvantage and are available for both urban and rural areas. Scores are calculated for each area. Areas are then sorted by score and grouped into 5 or 10 groups (quintiles or deciles). Low values indicate areas of disadvantage, and high values indicate areas of advantage.

Findings:

In 2006, Aboriginal and Torres Strait Islander peoples were over-represented in the three most disadvantaged deciles, ranked according to the ABS’s SEIFA Index of Relative Socio-Economic Advantage/ Disadvantage. For example, 31% of Indigenous Australians lived in the most disadvantaged decile areas, compared with 9% of the non-Indigenous population. Only 1% of Indigenous Australians lived in areas in the most advantaged decile.

Analysis at the jurisdiction level suggests that in all states and territories a greater proportion of the Indigenous Australian population lived in the most disadvantaged quintile compared with the non-Indigenous population. The Northern Territory had the highest proportion (58%) and the Australian Capital Territory the lowest proportion (27%) of Aboriginal and Torres Strait Islander people living in the most disadvantaged quintile areas. New South Wales had the lowest proportion (3%) and the Australian Capital Territory the highest proportion (10%) of Indigenous Australians living in the most advantaged quintile areas.

These results need to be interpreted with caution. Indigenous Australians often represent a small proportion of each Statistical Local Area (SLA) and therefore the socioeconomic status of the area will not always reflect the socioeconomic status of Indigenous Australians who live in the area. An analysis commissioned from the ABS’s 2001 census-based SEIFA Index of Advantage/ Disadvantage (Kennedy & Firman 2004), shows that Indigenous Australians in Queensland have a high level of socioeconomic disadvantage regardless of whether they live in SLAs classified at area-level as having high or low socioeconomic status. The methodology used took the same weights developed for the overall SEIFA Index of Relative Socio-Economic Advantage/Disadvantage, but generated a separate score for Indigenous Australians compared with non-Indigenous Australians in each area. The results found that 93% of Aboriginal and Torres Strait Islander people in Queensland were in the lowest decile for disadvantage. Of the approximately 126,000 Aboriginal and Torres Strait Islander people living in Queensland in 2001, fewer than 2,000 had SEIFA scores in the top 5 deciles, even though 35,000 live in SLAs coded to SEIFA scores in the top 5 deciles.

In future versions of the HPF, it may be possible to report on SEIFA scores calculated for individuals rather than at the SLA level (Baker & Adhikari 2007).

Implications:

This summary measure of disadvantage supplements what is known and reported in other measures about the relative disadvantage that Aboriginal and Torres Strait Islander peoples experience across a wide spectrum. Government policies to address social and economic disadvantages faced by Indigenous people are a vital component in closing the gap in health.

Poor health can also be a contributor to poor socioeconomic circumstances, in addition to being an outcome of those circumstances. A recent Australian study of people with serious chronic illnesses highlighted the financial stressors placed on people with these conditions and their carers (Jeon et al. 2009).

COAG has set six targets to close the gap in Indigenous disadvantage across health, education and economic participation. The commitments governments have made in this area are reflected in the National Indigenous Reform Agreement and the related national partnership agreements.

This measure will be a useful summary measure of progress in closing the gap in Indigenous life chances that are known to impact on health. However, it should be noted the measure can only be estimated every five years with each Australian census.